Question

For the following​ loan, find ​(a) the finance charge and​ (b) the APR. Use the accompanying table to find the APR to the nearest​ 0.5%. Joel financed a ​$2040 computer with 24 monthly payments of $ 93.19$93.19 each.

a.The finance charge is ​$_____

b.The annual percentage rate is _____%

Answer 1

a. Calculation of Finance Charge
Original Cost of Computer		$2,040
Number of Monthly Payments		24
Total Amount of Monthly payment paid	$ 2,236.56
($93.19 * 24 EMI)
Finance Charge = $2236.56- $2040	$     196.56
b. The Annual Percentage Rate is
Interest/Finance Charge Paid		$     196.56
Amount of Loan			$2,040
Annual Percentage Rate		8.99266
		or Say		9%
Data		Description
2		years of Loan
$93.19		Monthly payment
$2,040		Amount of Loan
Formula Used
=RATE(2*12,-93.19,2040)*12
2= 2 Years
12 = Months
-93.19 = Montly payment
2040 = Loan Amount
12 = Annual percentage calculation